Majedie redeems debt to cut gearing – Majedie Investments PLC has given notice that it is exercising its right to redeem all of the outstanding £13.5m of its 9.5% coupon bond that was due to mature in March 2020. 6 December 2017 will be the redemption date.
As Majedie is buying back the bond early, it has to pay compensation under the terms of the bond to bondholders. The amount payable (which also includes accrued but unpaid interest) is calculated with reference to the yield on the UK Government’s 4.5% Gilt which matures on 7 March 2020 as observed on the 2 November 2017, the second business day prior to the notice of redemption.
The purchase price is 120.942, the total accrued interest payable is £236,064.56 and the total cash payment is £16,563,234.56.
Chairman Andrew Adcock commented “The company is taking action to reduce its overall gearing and particularly the most expensive 9.5% Debenture, of which GBP 13,500,000 is outstanding, whilst equity markets are at or near their all-time highs. On a marked to market basis, the NAV per share will be reduced by 0.6%, the Board believes that is a prudent course of action.”
MAJE : Majedie redeems debt to cut gearing